I know right? He is just scared for his bottom line, and his soon-to-become useless GPUs

Hey, the GPU I mined with a year ago and that paid off itself works just fine for gaming. Can’t do that with ASICs.

"Bitcoin had been transformed from an anarachistic challenge to the financial status quo, to the crypto spawn of Satan, fuelled by cut-throat greed and delusions of avarice." - MatTheCat"these people don't seem to want to stop till Bitcoin is completely destroyed and left like an old cum rag in the corner of the room." - ShroomsKit

This type of action unfortunately will hurt bitcoin. I can not say it will kill it, but it will not be a positive thing. And it will not be a positive thing for the investors in this company.

One of the strengths of bitcoin is that the block reward is distributed through the community. People like me spend or trade almost their entire mining proceeds in the community. Having more bitcoin (from mining) encourages me to spend more even more in the community.

While the owners of this ASIC company could act the same as I do, I really doubt that will happen. They will be turning in their bitcoin at the trading houses and depressing the value of bitcoin. They will not be helping others that accept bitcoin do business, they will just be mining and selling.

Slowly as the price/difficulty ratio gets worse, miners like me will drop out. We can not switch to FPGA as the difficulty will be so high that it will not be worth it even if electricity as free.

In the end you will have a massive centralization of bitcoin AND less economic activity. How can this be good? The price of bitcoin will drop and the INVESTORS of this company will get screwed as well.

Simply put.... we are at least two years too early for ASIC mining. Bitcoin has not grown enough for this yet. The investors will not make their money back.

This type of action unfortunately will hurt bitcoin. I can not say it will kill it, but it will not be a positive thing. And it will not be a positive thing for the investors in this company.

One of the strengths of bitcoin is that the block reward is distributed through the community. People like me spend or trade almost their entire mining proceeds in the community. Having more bitcoin (from mining) encourages me to spend more even more in the community.

While the owners of this ASIC company could act the same as I do, I really doubt that will happen. They will be turning in their bitcoin at the trading houses and depressing the value of bitcoin. They will not be helping others that accept bitcoin do business, they will just be mining and selling.

Slowly as the price/difficulty ratio gets worse, miners like me will drop out. We can not switch to FPGA as the difficulty will be so high that it will not be worth it even if electricity as free.

In the end you will have a massive centralization of bitcoin AND less economic activity. How can this be good? The price of bitcoin will drop and the INVESTORS of this company will get screwed as well.

Simply put.... we are at least two years too early for ASIC mining. Bitcoin has not grown enough for this yet. The investors will not make their money back.

Exactly what I was referring to. Nothing to do with bottom line ( my rigs are long paid off and with cheap electricity my GPUs will be humming still for quite a while ).

Lots of people can buy a $200 CPU or a $850 GPU and start mining right away or a $600 FPGA but how many people will afford to buy a $500 000 ASIC farm ?

This is centralization and as soon as the ASIC starts running the other miners will be phased out, ending up in him controlling about 70% or more of the network.

He is not selling ASIC to the public but instead he is using investor money to get himself ( and only himself ) an ASIC farm that can totally outcompete everyone else on the network.

Not sharing the ASIC design and passively attacking the network this way, who cares if it is Vladimir or the NSA because the outcome is the same : one company ruling BTC and doing as it pleases without anyone having any impact.

By ASIC I think he means something that costs millions of USD to develop initially but after that this investment will give him devices like 1 ghash/s for 10W for $100 and he can use approximately 12000 of these devices at a cost of 1.2-1.5 million USD to get more than 51% of the network.

LargeCoin is NOT a real ASIC and I have not seen anything that looks like a real ASIC so far just maybe a sASIC. He says it has twice the magnitude of GPU efficiency which sounds bad for everyone else not having access to this device.

Phrases like "I am forming a new company that will engage into large scale mining. We have concluded a deal with subcontractors to produce a significant amount of ASIC based mining hardware (up to 2-3 orders of magnitude more power efficient and dense comparing to GPU based Bitcoin Miners). Our target is to build multi Thps (X 000 000 Mhps) bitcoin mining operation" and "We, however, have no plans to engage into manufacturing and sales of bitcoin mining hardware." tell us his real intentions in regards to this corporation.

We, however, have no plans to engage into manufacturing and sales of bitcoin mining hardware.

this could be bad.you could force minor(GPU) miners out and take control of the network, if you do not give them a chance to upgrade to better hardware(ASIC).

but except that, GO! GO! GO!, secure the network.

It is a dog eat dog world out there. I don't see why this is an issue. If Vladimir decides to invest hundreds of thousands of dollars into mining equipment, he should be able to reap the full rewards and not have to feel guilty about stepping on some toes.

Nobody was talking about Vladimir not reaping the rewards, but about one entity potentially taking control of the network. Any and all vulnerabilities of that entity then become vulnerabilities of the Bitcoin network.

They'rethere, in their room.Your mining rig is on fire, yet you're very calm.

This isn't Vladimir's fault, but I do wonder if BitCoin transaction processing isn't inevitably going to end up centralized and controlled by a small number of companies, just because there are going to be big economies of scale. You'll want the right kind of hardware, which will be cheaper in bulk, the best designs, which you won't want to share, and a presence in places with really cheap energy, which will also be cheaper to buy in bulk.

Added to that when you've got a small number of companies controlling a business, they have an incentive to buy each other up or form a cartel. They'll also be profitable businesses with a lot of assets and contracts with other big businesses, so they'll be very easy for governments to regulate.

You guys are forgetting that this isn't the only game in town. Even if he was to set up and run --lets say-- 2 Thash/s of ASICs, that isn't a monopoly or even 50%.

While it may be correct that GPU/CPU miners may be forced out of the market, I do not think that so many will be removed that the network rate drops to where he has 51%.

Besides that, do you remember Largecoin? They have been selling like hotcakes, arbitrarily capped at 5 units per customer, to customers that obviously want more than just 5. 5 Largecoins is 100 Ghash/s, and so only 10 users with 5 units each is a whole terahash. Not to mention the multiple orders for FPGA based devices, while admittedly being the worse for power consumption, are much better than GPUs and will remain so for the foreseeable future.

LargeCoin is NOT a real ASIC and I have not seen anything that looks like a real ASIC so far just maybe a sASIC. He says it has twice the GPU efficiency which sounds bad for everyone else not having access to this device.

Vladimir said 2-3 orders of magnitude or 100-1000 times more efficient than GPUs.

LargeCoin is NOT a real ASIC and I have not seen anything that looks like a real ASIC so far just maybe a sASIC. He says it has twice the GPU efficiency which sounds bad for everyone else not having access to this device.

Vladimir said 2-3 orders of magnitude or 100-1000 times more efficient than GPUs.

Indeed. I misunderstood. Corrected.

This really is bad news for BTC and decentralization.

So if he has a device for $10 that does 10 ghash/s then with with a measly amount of money he owns the network very easily. Initial costs for ASIC are high but afterwards it is very easy and cheap to replicate the design.

Besides that, do you remember Largecoin? They have been selling like hotcakes, arbitrarily capped at 5 units per customer, to customers that obviously want more than just 5. 5 Largecoins is 100 Ghash/s, and so only 10 users with 5 units each is a whole terahash.

Besides that, do you remember Largecoin? They have been selling like hotcakes, arbitrarily capped at 5 units per customer, to customers that obviously want more than just 5. 5 Largecoins is 100 Ghash/s, and so only 10 users with 5 units each is a whole terahash.

They are not capped.

Cool, they mentioned a per-user limit at one point but that must have been lifted.

I think this needs to be done before he gets them operational, otherwise BTC is doomed and no algo change is possible thereafter without the ASIC miner denying the change.

There is no mechanism to either enforce or deny algorithm changes, so it really doesn't matter when you do it. Miners may use their political power, but not hashing power, in this case. I myself don't think that this will ever be needed, just wanted to point out the weakness of your argument there.

I think this needs to be done before he gets them operational, otherwise BTC is doomed and no algo change is possible thereafter without the ASIC miner denying the change.

There is no mechanism to either enforce or deny algorithm changes, so it really doesn't matter when you do it. Miners may use their political power, but not hashing power, in this case. I myself don't think that this will ever be needed, just wanted to point out the weakness of your argument there.

I think this needs to be done before he gets them operational, otherwise BTC is doomed and no algo change is possible thereafter without the ASIC miner denying the change.

There is no mechanism to either enforce or deny algorithm changes, so it really doesn't matter when you do it. Miners may use their political power, but not hashing power, in this case. I myself don't think that this will ever be needed, just wanted to point out the weakness of your argument there.

So how would an algo change happen ?

Start a new chain ?

Vote with hashing power in blocks like now ?

Gavin has the last word ?

Thanks for letting me know, memvola !

Here's a suggestion, both you and Vladimir are in the UK, maybe you should pay him a visit IRL and perhaps learn a few things about being profitable. Bring your wallet too, no point missing a good investment.

it is not a 51% fear. its a 30% cheap mining power fear, will become a 70% cheap and impossible to have any competition with.small miners will quit, if its not profitable for them.

i would be more comfortable with you selling mining hardware, and thereby distribute the cheap mining power.

One cannot stop progress. GPU and FPGA's are already doomed. I am sure there will be plenty of ASIC gear on the market given time, with or without us.

What needs to happen ( I think ) is we switch the algorithm as soon as the guy has paid millions for his ASICs.

I think this needs to be done before he gets them operational, otherwise BTC is doomed and no algo change is possible thereafter without the ASIC miner denying the change.

GPUs will be able to adapt. FPGA should be able to adapt to new algo. The only one that is screwed is the ASIC guy.

If this ASIC mambo jumbo goes forward then I think BTC is as "good" as PayPal or the Bank of England.

The community now has to ask itself this : "Do we really want a company effectively owning Bitcoin ?"

Good luck Vladimir but I don't like where this is going and I bet I am not the only one.

This centralized mining is far away from what Satoshi envisioned ( everybody with a CPU can mine ); GPUs are fine and so are FPGA but ASIC which only a millionaire can develop is too far.

"Huge," publicly held mining operations is another example, along with Botnets, of capitalistic "progress," that is exploitative of a system designed to be generally fair and distributed.Now, I might have a different opinion on this if compensating market forces allowed for a reasonable level of competition with any huge entity. This is not the case, so I reject the premise of "One cannot stop progress," as a good faith rationalization. This move is not in good faith for Bitcoin. A more accurate assessment of these efforts would be that capitalistic profiteering nearing monopoly is hard to stop without limiting principles, regulation, etc.

Why does Bitcoin need enemies when you have supporters like these?

Like I've said before Bitcoin does not need Botnets and huge mining operations to secure the blockchain. That's silly.

LargeCoin is NOT a real ASIC and I have not seen anything that looks like a real ASIC so far just maybe a sASIC. He says it has twice the GPU efficiency which sounds bad for everyone else not having access to this device.

Vladimir said 2-3 orders of magnitude or 100-1000 times more efficient than GPUs.

Indeed. I misunderstood. Corrected.

This really is bad news for BTC and decentralization.

So if he has a device for $10 that does 10 ghash/s then with with a measly amount of money he owns the network very easily. Initial costs for ASIC are high but afterwards it is very easy and cheap to replicate the design.

I would expect he means 100-1000 times more energy efficient, not price efficiency. 200MHash/J-2000MHash/J would be incredible but possible. 150Mhash/$-1500Mhash/$ seems a lot less likely.